GBPUSD at first appears overbought and ready for a pullback. But here are three reasons why price is telling us it can go further: 1. the 22 Day RSI is still trending higher. We wait for a counter move the other way, off an extreme level, before signalling a change of direction. 2. the 22 Day Stochastic signals a sell, but it until it crosses below 80 it can...
S&P500 is breaking new highs to 2500, a key psychological and technical level. Here are 4 reasons why the market will move lower, and when: a. Relative Strength is up but trending lower; the divergence between RSI and price since 1st March (lower highs vs higher highs) is bearish. b. The stochastic shows price has moved higher with force, pushing above 97. ...
The danger with creating a narrative from a chart is that its all too easy to over simplify what was in fact a strange, complex, at times random course of events. As a result we may bias our interpretation to what 'fits' with what we see. That said I believe there is always a dominant factor, often hidden, that at its core drives a market through a particular...
Heating Oil this week broke above its 2 year high. The move was confirmed with a strong day's close above the high, and now the weekly bar is closing above - N.B: provided that Heating Oil holds in today's session. Seasonally August & September are strong months which lends another dimension to a pure chartist approach.
USDJPY broken down through 108 to initiate a sell signal. Hold to 105. Stop @ 110.50
The chart shows where major support and resistance is, and is there to indicate the trend. On smaller time frames you'll notice that Gold has over the past week firmly stayed at 1275, rather than dipping lower. The fact that this is happening near a turning point in a major downtrend may indicate that this an early signal to get long. If Gold moves above...
GDX is showing signs of a break higher as it approaches its downward trend, but doing so at a steady pace. Investors are building long positions. Perhaps with North Korea flinging rockets in Japan's waters, weaker earnings out US & Europe, the seasonal weakness of summer.. it all smacks of enough uncertainty for a flow back in the Gold.
1.16 - 1.17 is the top of range set over the last 12 months. Before this 2017 surge, price pulled back twice (and rapidly) from that range. Now its up again, and when looking at the CFTC Commitments of Traders Reports, Speculators have rarely been so long (i.e. crowded on the same side of the trade). Surely a pullback is due any minute now. And yet... momentum...
Norwegian Krone is highly correlated to Crude Oil futures (front month), but over the last year it appears to diverge. NOK/USD has continued to slide while Crude stabilised. This could be due to strengthening Dollar, and the low oil prices indicating weaker future economic growth. The blue trend line marks multi-year highs. With prices touching this trend,...
The DAX hardly moved last week, trading sideways through the path marking its recent upward trend. Sellers therefore appear to dominate buyers, as the price is not bouncing higher, as it did on its last cyclical lows. The 2017 rally has followed a path of cycles lasting 70 days. The last week marked the end of the recent cycle with no subsequent rally. Despite...
The melt up in the S&P500 -0.17% is beginning to show signs of massive over extension, with a 4-5% pullback highly probable in the coming weeks. The divergence between price and itsrelative strength is comparable to nearly 1 year ago. That time it was Brexit that triggered the sell-of, but the trigger is not important (or rather it is secondary); what matters is...
U.S. treasury bond yields are signalling deflation, whilst stock melt up indicating an inflationary economy. Does the bond market know something that stocks don't?
EUR/USD would appear overbought relative to its range since the start of 2015. But we can't ignore the fact that this the third time price is knocking on the ceiling of 1.12-1.15. We will be watching for a consolidation near these highs as a sign of a break higher. The catalyst will likely be a combination of improving European earnings, declining US earnings...
15 minute bars show a bearish head & shoulders pattern formed over the last 5 days. In addition, the RSI shows how yesterday's move marked the first 'oversold' zone in two weeks, and we see this as bearish too. Why do we interpret oversold as bearish? Because recent history shows that oversold (overbought) moves are followed successively by more oversold...
A psychological level but also Relative Strength (below) overbought over the last month, and not this high in over a year. Support below at 1.27 (top of pre-breakout range this year).
I don’t like to over-complicate technical charts, just gauge where price pressure is developing. The chart below shows EURUSD consolidating at 1.09 which means sellers are trying to short in to the downtrend marked by the red line, yet buyers are supporting the price above its 2017 channel high (in blue).. a bullish sign of a reversal. 1.12 looks possible in...
On the 24th April the CAC 40 made a huge gap up, from 5050 to 5260. An incredible 4%. In fact it is the largest gap we can see historically as far back as 2008. Gaps, as trades know, 'always' get filled. Statistically its more like 90% of the time. Whether bullish or bearish on the European reflation story, this trade is the same.. French stocks are likely to...
After the big sell-off on Weds and Thurs, today saw markets pull back some 60% of the sell-off. The floor for the week set at 2370-2380 is key, and today we ask whether it has no flipped to a zone of resistance..